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21 Cards in this Set
- Front
- Back
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Debt |
Money borrowed in exchange for interest. |
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Secured Debt |
Borrowed money that is backed by one or more assets as collateral |
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Unsecured Debt |
Borrowed money that is not backed with collateral. |
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Principal |
The original amount of money that was borrowed. |
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Bond |
A debt instrument that allows an investor to loan money for a defines period of time in exchange for regular interest payments. Repayment is made as a lump sum at the end of the period. |
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Corporate Bond |
A bond issued by a corporation. |
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Zero-Coupon Bond |
A bond that is issued at a deep discount to its face value and pays no interest. |
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Convertible bond |
A bond that the issuer can pay off prior to its maturity, ending the interest payments. |
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Government Bonds |
Bonds issued by governments. Called munis when issued by municipal givernments and treasuries when issued by the US gov't. |
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Bills |
Gov't bonds that mature in less than a year. |
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Notes |
Gov't bonds that mature in one to ten years. |
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Bonds |
Gov't bonds that mature in more than 10 years. |
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Par Value (Face Value) |
The amount of money loaned to the bond issuer. |
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Coupon |
The bond's interest rate. |
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Maturity Date |
The date at which the par value is repaid to the bondholder. |
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Yield to Maturity (TYM) |
The total return anticipated on a bond if the bond is held until maturity. YTM accounts for par value, market value (purchase price), coupon, current yield, and time to maturity. |
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Current Yield |
The interest, expressed as a percentage of current market value, an investor will receive for purchasing a bond and holding it for one year. Equals annual interest received divided by market value. |
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Annual Interest Received |
Par Value times the Coupon |
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Credit Risk |
The risk that the bond issuer fails to make interest payments of rails to repay the bond to maturity. |
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Interest Grade |
Bonds with the lowest credit risk, rated between Aaa/AAA and Baa/BBB |
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Junk Bonds |
Bonds with the highest credit risk, rated below Baa/BBB. |
